Archive for September 2011
China Hard Landing Fears – The Reality and The Preposterous
Slowdown fears in the market have shifted to China. The past two days has seen the start of a shift in sentiment with China exposures viewed more as risk than as opportunity. There is clearly some slowing in China, and there should be, because the government has been trying to slow the economy to help…
Read MoreStrong Labor Market Data Point – Unemployment Claims Solid Despite Department of Labor Explanation
In a curious press release, the Department of Labor came out this morning and highlighted some atypical calendar alignments for the unemployment claims data which make it more difficult for the government to adjust the not seasonally adjusted claims data for seasonal changes. As a result, the seasonally adjusted claims data fell by 37k to…
Read MoreRefinancing Activity Hits New Highs – Conditions now in Place for the Housing Market to Turn
Reports have recently been popping up that 30-year fixed mortgage rates in the US have approached 4%. This is a new low for the cycle. Much of the analysis I have read regarding mortgage rates is that they do not matter. The rational goes something like this: since mortgage rates have come down from the…
Read MoreGreece Will Stay On Board – Merkel and Papandreou Plan a Dinner Date in Berlin
Greece will ultimately stay on board. There I’ve said it – and it is really what I think will happen. There were a number of “unity” headlines hitting over night which have led to a continuation of the rally in global risk assets. Emerging Markets which looked sufficiently panic sold to call out yesterday are…
Read MoreGold – The Spot On Take From The Fundamental View
The Fundamental View has done a great job profiting from the bull market in gold and has also called the correction over the past month spot on. Worth reading for all gold investors. Click here to read The Fundamental View’s recent analysis of the gold market. The above link will take you right to The…
Read MoreEM Stock Markets – Destabilized by Currency Sell-offs and Capital Outflows
Developed market equities are attempting to stabilize based on additional talks from Eurozone leaders who are meeting with the IMF and reported to be discussing items such as expanding the size of the EFSF, creating a TARP-EU, and recapitalizing more of the European financials. Developed market investors are attempting to look ahead during scary times.…
Read MoreTom Brady, Mos Def and Deckers launch Ugg for Men
Decker (DECK) has been one of the biggest success stories in the consumer space this decade. Since the depths of the financial crisis the stock has more than quintupled from sub-$20 to $100. The brand expansion and sustainability of growth have been questioned all through the bull market in the stock. Ugg has been the…
Read MoreNike’s Strong Results Indicative of Solid Global Consumption
Nike (NKE) reported an excellent set of results after the close last night. Headline earnings were $1.36 vs a street consensus of $1.21 (12.4% beat). I listened to the Nike earnings conference call and was really impressed with the strong business trends relative to the obvious dislocations we are seeing in the market and talk…
Read MoreEurope’s Minimalist Approach Is the Wrong Course
What an 18 hours, as a conflux of negatives weigh on the market. In wrenching fashion, the US markets are down 6% since yesterday at 2:00pm. Most international markets around the world are down significantly more. Many emerging markets are off over 10% over two days. The Fed implemented Operation Twist yesterday, and the size…
Read MoreOperation Twist – What the Fed May Announce Today and the Implications
The Federal Reserve is likely to announce additional easing measures at the conclusion of the two-day Fed meeting today. Additional easing is anticipated by the market but there are a number of uncertainties related to the scope of what the Fed will implement. The most focused on initiative is called “Operation Twist” which is jargon…
Read MoreWhy A European Sovereign Debt Crisis Can Be Avoided
The European sovereign debt crisis has dominated financial news and been the primary driver of markets for the past month. I would argue that we are in an actual crisis in Europe and this is no longer about fears of a crisis. When banks can’t finance independently through the market and when large countries can’t…
Read MoreFlow of Funds Household Net Worth – US Making Progress
On Friday, the Federal Reserve Board released the quarterly Flow of Funds data which measure the US household sector’s assets, liabilities, and net worth. The data are released with a lag as we just received Q2 measurements, two and a half months after the calendar quarter came to a close. While the level of net…
Read MoreThe Johnny Cash Project – Google Now A Global Marketing Titan
Google recently ramped up spending to pursue initiatives described by the company as the next billion dollar opportunities. During the first quarter of this year, Google had plenty of detractors as the growth rate in expenses far outpaced the growth rate in sales. In Q2, there was a slightly different tune as Google achieved a…
Read MoreTarget – Missoni is a Home Run!
A number of news reports have been out regarding the new exclusive apparel and home line designed by Missoni for Target (TGT). The Italian designer is very well regarded in the fashion world and Target getting an exclusive launch of this magnitude speaks to the credibility of the merchandising team and the power of the…
Read MoreEurope Starts to Come Back Together – Bullish Sign for Depressed Markets
Yesterday, German Chancellor Merkel and French President Sarkozy proclaimed they are convinced that Greece will remain in the Eurozone. While the announcement was short on details, the spirit of it was enough to lift markets. Why news such as this can have an impact is because the markets have started to invest with “crisis” as…
Read MoreWhy the Market Will Bottom Higher than 2009 – An Analysis of S&P 500 Free Cash Flows
The market is in the midst of a crisis. The US sovereign credit rating has been downgraded. Developed market economies are demonstrating an inability to create jobs. Greece is about to default on its sovereign debt which will lead to contagion through the financial system in Europe. French and other European financials will be downgraded…
Read MoreChitaly Starts to Mambo Italiano – China in Talks To Buy Italian Sovereign Debt?
I mentioned this possibility over a month ago on August 5th, in the story “Chitaly – China to Purchase Italian Sovereign Debt?” Headlines just hit that Italy is in talks with China to directly buy Italian bonds according to the FT. This headline caused an immediate lift to depressed markets which is quickly getting faded. I believe this may…
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